WENTWORTH RESOURCES REPORTS $4.5 MILLION LOSS AS MNAZI BAY DEVELOPMENT CONTINUES

Wentworth Resources has reported a $4.5 million loss for the six months ended in June 30th 2015 as second quarter exploration dropped and development capital expenditures increased significantly to $2.31 million and $7.04 million, respectively, compared to $3.69 million and $0.30 million, respectively, in 2014.
The loss is also due to an increase in financing costs as the company raised funds for development in Tanzania including $4.36 million of a credit facility to fund operator cash calls for Mnazi Bay development expenditures
According to financial statements released in Wednesday the working capital is also down to $5.77 million compared to $15.84 million at December 31, 2014
On July 1, 2015 the company successfully completed a private placement and issued 15,412,269 new common shares for cash consideration of $0.50 per share for total gross proceeds of $7.64 million.
According to managing director Geoff Bury the new funds further secure the Company’s balance sheet in advance of generating cash flow once gas sales start in the coming weeks.
“The recent successful equity raise completed on July 1 demonstrates confidence in our long-term investment strategy in East Africa.  These new funds further secure the Company’s balance sheet in advance of generating cash flow from natural gas sales to the new government owned transnational pipeline in Tanzania. With discussion in regards to the payment guarantee agreement at an advanced stage, the Company looks forward to bringing gas on stream in the weeks ahead.  We wish to thank shareholders for their continued support during this exciting period in the Company’s history,” he said
Wentworth Resources has 39.925 percent participating interest in exploration and 31.94 percent in production while the operator Marel et Prom has 48.06 percent and 60.075 percent participating interest in exploration and production respectively. The Tanzania Petroleum Development Corporation will also acquire a 20% production interest during production.

The oil giants are coming to Tanzania


International oil giants are bearing down on East Africa. Off the coast of Tanzania, the discovery of 46.5 trillion cubic feet of natural gas reserves has put the country on the world energy map. The number is expected to rise to 200 trillion cubic feet in the next two years, and eventually transform Tanzania into a middle-income country.
Companies like Exxon Mobil, BG Group and Norway´s Statoil are working with the Tanzanian Petroleum Development Corp (TPDC) in exploration, building infrastructure and construction. However, the real issue is the profit-sharing contracts currently being negotiated between the big oil companies and the government.
The Production-Sharing Agreements (PSA) between the international firms and the TPDC are confidential. However, the draft of a contract with Statoil has leaked. Instead of the expected 50-75%, Tanzania would only be getting 30-50% of the “profit gas.” The government has little to no leverage but everyone knows the country needs the investment big oil could bring.
With elections coming up this year, the oil and gas question is a hot topic. For a politician trying to gain traction it is heaven-sent. From independence until his retirement in 1985 the country was lead by the great Julius Nyerere, whose ideology was socialist and has been called communist. The communitarian mindset lead to many great things and is still tangible in political discourses. However, it also lends itself to misuse.
The pre-election debate on the natural gas question for instance is full of flaming protectionist rhetoric. Here-comes-the-imperialist-west-again-we-must-protect-our-interests-so-vote-for-me-ism seems popular, especially with ruling party CCM. It simplifies things nicely, takes the attention away from failing schools and hospitals and reminds everybody that the problem is, really, external.
In this spirit parliament has just approved the Non-Citizens Employment Regulation Bill making it much harder for foreigners to work in the country. Partnership with various multinational oil giants will certainly see an increase in the number of foreign workers, never-mind the Chinese. Actually, do mind the Chinese, but somebody else can write about that. Ensuring that the ordinary worker gets a piece of the sloppy oil cake is very important, although it remains debatable whether this bill is the most effective way to go about it. One could argue that it discourages investment and that it forces companies to weasel their way around state legislation. Another problem is the lack of skilled workers, especially for managerial positions. Statoil has some great academic exchange and partnership programs, for instance with the University of Dar es Salaam, but is it enough?
Then there is the issue of corruption and lack of transparency. New money is flooding in, especially to the largest city, Dar es Salaam. Although some money ends up in the right hands and is used for the right things there is a definite partiality in Dar to making money vanish. Valiant efforts have and are being made to fight corruption, but corruption penetrates nearly ever aspect of society at all levels. The ecosystem of corruption is deep and old, very old, so old it should have its own museum, celebrating a long, creative and colorful history of soda-buying, palm-greasing and generally being up to something.
Will we see the oil and gas turn Dar into another Lagos? A widening gap between rich and poor could lead to a more divided society, higher crime rates and more violent crimes, even violent conflict. There has already been violence in the Southern Mtwara district over the building of a pipe-line to Dar es Salaam.
I think it is safe to say that for East Africa as a region, the development of the oil sector cannot be seen as only a blessing or only a curse. But over the coming years there will be some pretty rude changes to the region’s geo-politics in which the discoveries of oil and natural gas are a major factor.
The important thing for us mortals is not to loose interest and to continue to apply pressure on the various actors involved. For instance, if oil giants like Statoil are serious about supporting sustainable long-term development they must invest heavily and whole-heartedly in training and succession programs, and they must assist with strong legal support for the governments they are negotiating with, fair fight, fair play. Similarly, politicians who are serious about protecting national interest must think beyond party-interest and short-term political gain in the things that they say and the papers they sign. The situation warrants an appeal to the highest sense of public duty.
As observers, both in the global South and North, it is our job to engage ourselves in the processes, blow whistles and put pressure on decision-makers. What happens in the next few years will determine the fate of the region for at least the next fifty if not beyond.

Efforts to Build Oil,Gas Local Content.

 

The  African Capacity Building Foundation(ACBF) has hailed current government efforts to build  a strong local content legal and policy framework to guide the oil and  gas sector.
Prof  Emmanuel Nnadozie  the Executive Secretary said the local content policies and legislations would ensure the local populace are active in the oil and gas value chain.

SWALA ENERGY GETS MINISTERIAL CONSENT FOR TANZANIA FARM-OUTS

Swala Oil and Gas (Tanzania) plc (‘Swala’ or ‘the Company’) is pleased to advise that it has received a 
no objection notice from the Ministry of Energy and Mines (“MEM”) to the farm-out of 50% of its 
interests in the Kilosa-Kilombero and Pangani licences to Tata Petrodyne Limited (“TPL”). 
With the receipt of consents from the Tanzanian Petroleum Development Corporation, the 
Tanzanian Revenue Authority and now from the Ministry of Energy and Mines, the Company is 
awaiting only the consent of the Fair Competition Commission (“FCC”). The Company shall update 
the market once this final consent is received. 
Dr. David Mestres Ridge, Swala CEO, said: “The rapid approval by our regulators to the farm-out of 
our two licences illustrates their desire to encourage activity in this important economic sector. We 
are confident that the FCC consent shall be received soon, which shall allow TPL to join the licence 
joint venture ahead of the planned drilling campaign.” 
For further information please contact: 
Swala Energy Limited 
David Mestres Ridge (CEO) 
david.mestres@swala-energy.com 
www.swala-energy.co.tz 
Frontline Porter Novelli 
Irene Kiwia 
T. +255 787 611 213 
irene@frontline.co.tz 
About Swala: 
Swala is an affiliated company to Swala Energy Limited, a company in turn listed on the Austral
SOURCE:Swalaenergy.com

Petroleum Industry's Local Impact

Tanzaniapetroleum’s  core objectives include the acquisition of latest information on  Tanzania’s exploration and production activities,gain exposure to     the latest trends and development in the East African market and  to keep abreast of geopolitical,industrial and technological developments.
Articles 10 and 109 of  2010  mining Act Stipulate that exploration firms must make provisions for local ownership in areas where they are active.
Therefore  as active players in the industry we are committed to act as a check and balance against other players as we move closer to commercial production.
Some of the prevalent concerns include,transparency in revenue management,sharing of royalties with local communities,access  to information,environmental degradation  and lack of consultation with communities  in oil-rich regions.
Lastly  is to highlight  the  secrecy in public sharing contracts that the government has with oil,gas and mining companies.
    The writer is an oil and gas analyst.Member of Tanzania Petroleum

President Kikwete signs oil, gas bills into law

Dar es Salaam. President Jakaya Kikwete has assented to five bills, including three energy-related legislations that were fiercely opposed in Parliament.
The Petroleum Bill, Tanzania Extractive Industry (Transparency and Accountability) Bill and the Oil and Gas Revenue Management Bill, all of 2015, were rejected by the Opposition after the government submitted them for debate under a certificate of urgency.
Opposition lawmakers later walked out of Parliament and left Dodoma when their attempts to scuttle the bills failed.
In a brief ceremony at State House yesterday, President Kikwete signed the bills in a move Chief Secretary Ombeni Sefue said would ensure stability in the extractive industry.
The other two bills assented to were the Teachers Service Commission and the Commodity Exchange, which seek to establish a teachers’ body and the commodity exchange market respectively. President Kikwete did not speak at the function.
“These are very important legislations to farmers, teachers as well as the fast growing extractive industry especially the oil and gas sector. These laws seek to address challenges faced by teachers, farmers and seek to position Tanzania on a strong institutional, legal and regulatory platform for oil and gas economy for the benefit of present and future generations,” said Mr Sefue. The Petroleum Act seeks to establish the Petroleum Upstream Regulatory Authority (Pura) and designating Tanzania Petroleum Development Corporation (TPDC) as the National Oil Company which will participate fully from the petroleum exploration to production.

Gas pipeline to be complete next month

TRANSPORTATION of natural gas from
Madimba in Mtwara to Kinyerezi I Power Plant in Dar es Salaam will start
early next month after completion of the construction of the
542-kilometre natural gas pipeline project.
According to the Minister for Energy and
Minerals, Mr George Simbachawene, the transportation of natural gas
will save over 1 1.6tri/- per year currently spent on importation of
fuel for electricity generation.
The pipeline will have an installed
capacity of transporting 784 million standard cubic feet daily, a volume
which can generate over 2,000 megawatts (MW) of electricity, including
the 300MW plant at Mnazi Bay.
Mr Simbachawene noted that upon
completion of the infrastructures, the project would see the country
getting reliable electricity supply, expansion and increase of
industrial production, cleaner environment and employment creation.
The Minister made his remarks yesterday
in Dar es Salaam after he visited Kinyerezi 1 Power Plant to inspect the
progress of the implementation of the project carried out by
contractors, TANESCO as well as Tanzania Petroleum Development
Corporation (TPDC).
He urged Tanzanians to be patient as
TANESCO will cut off electricity where repairs will be done so as to
ensure the availability of gas electricity in most parts of the country.
He stressed that the availability of
natural gas will help reduce the use of water where in some of the
hydroelectric dams that have slowed down production due to climate
change and environmental degradation.
Kinyerezi I Power Plant, Eng John Mageni noted that two out of four machines are complete and will produce 220Kv of electricity.
“The machines are currently on a test
run and within two weeks will be complete,” said Eng Mageni adding that
by early September this year, natural gas from Mtwara will be available
at the plant ready to be distributed to various sub stations including
the national grid.
In a related development, TANESCO
Managing Director, Eng Felchesmi Mramba said when Kinyerezi 1 Power
Plant kicks off, the company would significantly reduce the cost of
power supply.

He added that 150MW are expected to be
produced after the completion of the construction of Kinyerezi 1
Electricity Power Plant, a step towards the execution of the
government’s aim of adding electricity capacity on the national grid.

Several Australian Companies To Invest In Tanzania Gas Industry

SEVERAL Australian companies have shown
interest to invest in the country’s natural gas industry, says the
Tanzania Investment Centre (TIC).
The Mtwara Gas Pipeline is expected to
be inaugurated later this month and the facility will enable the country
to produce 2800MW of power by 2016.
East Africa is now a new oil and gas
frontier after a string of hydrocarbon discoveries, which producers hope
to exploit to supply energy-hungry Asian markets. Tanzania estimates it
has more than 55 trillion cubic feet (tcf) of natural gas.
TIC said “Australian companies are
confident that they are well positioned to add value in Tanzania gas
industry, given its significant experience, knowledge and capability.”
The statement pointed out that an LNG
industry has the capacity to transform the economy and in Australia it
was able to create over 103,000 jobs during the last decade.
“Once operational these projects will
create an estimated 1,159 jobs. TIC registers gas projects subject to
approval of the Ministry of Minerals and Energy,” the statement said.
The statement said the move by
Australian investors to show interest follows invitation by President
Jakaya Kikwete during his recent visit to Australia.
The statement quoted TIC Public
Relations Manager, Mr Daudi Riganda, as saying TPDC and Australia
based-company, Squire Patton Boggs hosted dinner for Mr Kikwete.
“President Kikwete used the platform to
engage leaders in Australian energy and resources sector on the
investment landscape in Tanzania,” the statement observed.
TPDC has been designated as the national
oil company with aspirations to continue to be involved in exploration
and development activity within Tanzania and expand its reach
internationally.
Mr Clare Pope, Partner in Energy and
Natural Resources at Squire Patton Boggs, said Tanzania had taken many
important steps to ensure the development of its oil and gas industry
and participation by significant international oil and gas companies.
Mr Campbell Davidson, Managing Partner
of Squire Patton Boggs in Sydney, said: “As we see continued growth in
foreign direct investment in East Africa, we are working with a number
of key energy clients in Asia-Pacific to ensure they can benefit from
the strides being made in the energy sector.”

Between March 2007 and March 2017 TIC
registered 35 projects from Australia, worth US $1,163 million. Once
operational these projects will create an estimated 1,159 jobs

Australia resource giants invited to Tanzania

Mr Kikwete on Tuesday met with Prime
Minister Tony Abbott in Canberra as part of a four-day visit, just
months before he ends his second and final term as leader of the east
African nation.
“We invite companies to develop the LNG,
make use of the natural gas to produce other products,” the president
said at the opening of the talks.
“I’m here to discuss how to further our relationship on a political level.”
About 18 Australian mining firms have
more than 100 operations in Tanzania, which has the second largest gas
reserves in east Africa, after Mozambique.
Mr Abbott said he hoped to build on the existing business ties.
“While we are separated by a great ocean, we are reaching out our hands across the ocean,” he said.
The two leaders are also understood to
have discussed security issues, including the threat from al-Shabab,
which is part of the Islamic State network.
Tanzania is keen to harness the use of Australian vocational trainers and universities.

On Wednesday, Mr Kikwete will receive an
honorary Doctor of Laws from the University of Newcastle, which has
offered scholarships to Tanzanian students for many years.

See Why Crude Oil Price Will Stay Low All through 2015 and About Mid -2016

 Now, a lot of people don’t understand what’s going on  and they dont know what causes the low crude  prices ? and
they think that OPEC is trying to punish the US Shell players and that’s not it
at all. OPEC did nothing, nothing, they just didn’t cut production and they’re
doing it for two very important reasons.
Number one, they’re
sticking a knife in Russia’s back while Russia’s down because they got really
upset over the whole Ukraine thing. Number two is they’re punishing the other
OPEC members that went rogue that didn’t cut production eight months ago when
they asked them to like Brazil and Venezuela.

So, keeping oil below
$85 a barrel is destroying Russia’s economy and it’s destroying Venezuela and
Brazil as well, so that’s what’s going on. We are predicting that those crude
prices will stay low all through 2015 and about mid-2016, it will get back up
to $85 a barrel